Follow KYC guidelines or face regulatory action: RBI deputy governor to banks
The RBI Deputy Governor, Swaminathan J, said bank boards should work towards building customer-centric banks where every individual, regardless of age, income, or background, feels valued and respected.
The RBI Deputy Governor, Swaminathan J, has asked banks to follow KYC guidelines with both "precision and empathy", failing which regulatory actions will be taken against them by the central bank.
Addressing the Conference of Directors of Private Sector Banks on Monday, the deputy governor also expressed concern that, in many cases, customer grievance mechanisms, including the internal ombudsman structure, are treated more as a formality than as a robust, effective resource.
The internal ombudsman mechanism should be more than words on paper; it should operate with the spirit and diligence necessary to resolve issues impartially and promptly, he said.
Bank boards, he said, should work towards building customer-centric banks where every individual, regardless of age, income, or background, feels valued and respected.
Customer-centric governance should be evident in every policy, process, and service touchpoint. More so when it comes to treating customers fairly and in a transparent manner, he said.
"As I have said before, this is an area where we are significantly focussing to enhance the customers’ trust in the system and will not hesitate to act in case a supervisory intervention is considered necessary," Swaminathan said.
He also asked the board members of banks, particularly the chair of the Customer Service Committee, to ensure that KYC guidelines are followed with both precision and empathy.
"The Reserve Bank will not hesitate to take regulatory or supervisory actions against entities that fail to address these concerns in a timely and considerate manner," said Swaminathan.
He also said while traditional governance responsibilities such as financial oversight and risk management will continue to remain top priorities, going ahead, boards need to embrace technology, drive digital transformations, adopt customer centricity, and ensure ethical leadership.
Edited by Swetha Kannan